Great Lakes Clinic has been asked to provide exclusive healthcare services for next year's World Exposition. Although flattered by the request, the clinic's managers want to conduct a financial analysis of the project. There will be an up front cost of $$160,000$ to get the clinic in operation. Then net cash inflow of $$1$ million is expected from operations in each of the the two years of the exposition. However, the clinic has to pay the organizers fee of the exposition a fee for the marketing value of the opportunity. This fee, which must be paid at the end of the second year, is $$2$ million.

$($a$)$ What are the cash flows associated with the project that are relevant for capital budgeting purpose?

Relevant cash flows:

Year $|$ Cash Flow

$0|$

$1|$

$2|$

$($b$)$ Find the project NPV if its cost of capital is $25$ percent and if its cost of capital is $400\%.$

NPV @ $25\%$:

NPV @ $400\%$:

$($c$)$ From the results in b$,$ can we conclue what the IRR of this project is$?$ Why or why not?

$($d$)$ If the project cost capital is $10$ percent, what would be the project's NPV in this case? Should the project be undertaken?

NPV @ $10\%$:

$*$please show how to solve in Excel with formulas$*$